Correlation Between Resintech Bhd and PMB Technology
Can any of the company-specific risk be diversified away by investing in both Resintech Bhd and PMB Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Resintech Bhd and PMB Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resintech Bhd and PMB Technology Bhd, you can compare the effects of market volatilities on Resintech Bhd and PMB Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Resintech Bhd with a short position of PMB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resintech Bhd and PMB Technology.
Diversification Opportunities for Resintech Bhd and PMB Technology
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Resintech and PMB is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Resintech Bhd and PMB Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PMB Technology Bhd and Resintech Bhd is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Resintech Bhd are associated (or correlated) with PMB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PMB Technology Bhd has no effect on the direction of Resintech Bhd i.e., Resintech Bhd and PMB Technology go up and down completely randomly.
Pair Corralation between Resintech Bhd and PMB Technology
Assuming the 90 days trading horizon Resintech Bhd is expected to under-perform the PMB Technology. But the stock apears to be less risky and, when comparing its historical volatility, Resintech Bhd is 2.36 times less risky than PMB Technology. The stock trades about -0.16 of its potential returns per unit of risk. The PMB Technology Bhd is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 173.00 in PMB Technology Bhd on August 31, 2024 and sell it today you would lose (5.00) from holding PMB Technology Bhd or give up 2.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Resintech Bhd vs. PMB Technology Bhd
Performance |
| Timeline |
| Resintech Bhd |
| PMB Technology Bhd |
Resintech Bhd and PMB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Resintech Bhd and PMB Technology
The main advantage of trading using opposite Resintech Bhd and PMB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resintech Bhd position performs unexpectedly, PMB Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in PMB Technology will offset losses from the drop in PMB Technology's long position.| Resintech Bhd vs. Digistar Bhd | Resintech Bhd vs. Minetech Resources Bhd | Resintech Bhd vs. Swift Haulage Bhd | Resintech Bhd vs. Bina Darulaman Bhd |
| PMB Technology vs. Pantech Group Holdings | PMB Technology vs. Coraza Integrated Technology | PMB Technology vs. Choo Bee Metal | PMB Technology vs. Eonmetall Group Bhd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
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